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PRESENT ECONOMIC SCENARIO

Himachal Pradesh has emerged a leader in Hill Area Development. Himachal is an ideal destination for investment in Power and Tourism sector. Responsive administration and conductive macro-economic conditions have induced a competitive environment in the economy of Himachal Pradesh.

Table: 2.01 Comparison between Average Annual Growth rate (%) of Himachal Pradesh and National Economies

Plans

Period

Himachal Pradesh Economy

National Economy

First Plan

1951-56

(+) 1.6

(+) 3.6

Second Plan

1956-61

(+) 4.4

(+) 4.1

Third Plan

1961-66

(+) 3.0

(+) 2.4

Annual Plans

1966 to 1968-69

….

(+) 4.1

Fourth Plan

1969-74

(+) 3.0

(+) 3.4

Fifth Plan

1974-78

(+) 4.6

(+) 5.2

Annual Plans

1978-79 to 1979-80

(-) 3.6

(+) 0.2

Sixth Plan

1980-85

(+) 3.0

(+) 5.3

Seventh Plan

1985-90

(+) 8.8

(+) 6.0

Annual Plan

1990-91

(+) 3.9

(+) 5.4

Annual Plan

1991-92

(+) 0.4

(+) 0.8

Eighth Plan

1992-97

(+) 6.3

(+) 6.2

Ninth Plan

1997-02

(+) 6.4

(+) 5.6

Tenth Plan

2002-07

(+) 7.6

(+) 7.8

Eleventh Plan

2007-12

(+) 8.0

(+) 8.0

Source: Economic & Statistical Deptt. Himachal Pradesh

The State Gross Domestic Product (GSDP) at factor cost at constant (2004-05) prices in 2012-13 is estimated at 44,480 crore as against 41,908 crore in 2011-12 registering a growth of 6.1 percent during the year as against the growth rate of 7.3 percent during the previous year. At current prices, the GSDP is estimated at 73,710 crore as against 64,957 crore in 2011-12 showing an increase of 13.5 percent during the year.

The Per Capita Income at current prices witnessed an increase of 9.7 percent as it increased to 67,839 in 2012-13 from 61,855 in 2011-12. The increase in total State Domestic Product is mainly attributed to 9.5 percent increase in Primary sector, 10.0 percent in Community & personal services sectors, 6.2 percent in Transport and Trade, 4.8 percent in Finance & Real estate. Whereas the Secondary sector increased by only 3.4 percent. Food-grains production, which was 15.44 lakh MT during 2011-12 has increased to 15.68 lakh MT during 2012-13 and is expected at 15.16 lakh MT (anticipated) in 2013-14. The fruit production has also increased by 49.1 percent i.e from 3.78 lakh MT in 2011-12 to 5.56 lakh MT in 2012-13 and during 2013-14 (up to December, 2012) production was 8.28 lakh MT.

The economic growth in the State is predominantly governed by agriculture and its allied activity which has witnessed not much fluctuation during nineties as the growth rate remained more or less stable. The decade witnessed an average annual growth rate of 5.7 percent, which is at par with national level. The economy has shown a shift from agriculture sector to industries and services as the percentage contribution of agriculture and allied sectors in total State Domestic Product has declined from 57.9 percent in 1950-51 to 55.5 percent in 1967-68, 26.5 percent in 1990-91 and to 14.42 percent in 2012-13.

The share of industries and services sectors respectively has increased from 1.1 & 5.9 percent in 1950-51 to 5.6 and 12.4 percent in 1967-68, 9.4 & 19.8 percent in 1990-91 and to 18.23 and 41.93 percent in 2012-13. However, the contribution of other remaining sectors showed a favorable shift i.e. from 35.1 percent in 1950-51 to 39.84 percent in 2012-13.

The declining share of agriculture sector do not, however, affect the importance of this sector in the State economic growth still is being determined by the trend in agriculture and horticulture production. It is the major contributor to the total domestic product and has overall impact. Due to lack of irrigation facilities our agricultural production to a large extent still depends on timely rainfall and weather conditions. High priority has been accorded to this sector the Govt.

The State has made significant progress in the development of Horticulture. The topographical variations and altitudinal differences coupled with fertile, deep and well drained soils favor the cultivation of temperate to sub-tropical fruits. The region is also suitable for cultivation of ancillary horticultural produce like flowers, mushroom, honey and hops.

2.1 Gross State Domestic Product

Gross State Domestic Product (G.S.D.P.) or state income is the most important indicator for measuring the economic growth of a state. According to quick estimates, the total State Domestic Product for the year 2012-13 is 44,480 crore against 41,908 crore in 2011-12 thereby registering a growth of 6.1 percent at constant prices (2004-05).

2.2 Per Capita Income

According to quick estimates based on new series i.e 2004-05 series, the per capita income of Himachal Pradesh at current prices in 2012-13 stood at 83,899. This shows an increase of 11.6 percent over 2011-12 75,185. At constant (2004- 2005) prices the per capita income during 2012-13 is estimated at 51,730 against 49,203 in 2011-12 witnessing an increase of 5.1 percent.

2.3 Secrotal Contribution

The sectoral analysis reveals that during 2012-13, the percentage contribution of Primary sectors to total G.S.D.P. of the State is 19.72 percent, Secondary Sector 38.35 percent, followed by Community and Personal Services 18.46 percent, Transport, Communications and Trade 15.17 per cent and Finance and Real Estate 8.30 per cent.